Oil near 2015 highs on strong China data

USA-SHALE  PERMIAN

One of the big questions in 2018 is how much shale oil will the U.S. produce

West Texas Intermediate, the United States benchmark, is now trading at the highest level since mid-2015, pushed above $60 a barrel by a severe cold snap in the northeastern U.S. that spiked demand for heating fuel.

Oil prices rose on Wednesday, with US light crude hitting highs not seen since June 2015 after disruptions to a major pipeline dented Canadian deliveries to the United States, where crude inventories were also reported to be falling.

WTI rose 58 cents to $60.42 per barrel on Friday, its best closing price since June of 2015; Brent rose 76 cents to $66.92 per barrel.

In worldwide markets, Brent crude oil futures were also up, supported by ongoing supply cuts by top producers OPEC and Russian Federation. Since the start of the year, Brent and WTI have risen by 17 and 12%, respectively, although the price rises from mid-2017 are much stronger, at almost 50%.

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Again, the Energy Information Administration data released on Thursday showing a drop in domestic oil production (to 9.75 million barrels per day last week from 9.79 million bpd the week before) was credited for WTI's strong performance, while traders boosted Brent prices on news that China has issued crude import quotas totaling 121.32 million tons for 44 companies in its first batch of allowances for 2018.

USA bank Goldman Sachs also warned of greater price volatility ahead, citing rising tensions in the Middle East, especially between OPEC members Saudi Arabia and Iran, along with soaring US oil production. The US expects production to top 10 million barrels a day in the coming year. Inventories excluding the nation's strategic reserve have declined more than 11 per cent in the previous year.

In global markets, China has issued crude oil import quotas totaling 121.32 million tons for 44 companies in its first batch of allowances for 2018. Output peaked at 9.6 million bpd in 1970. The cuts started last January and are scheduled to cover all of 2018.

Consultancy JBC Energy said Libyan pipeline outages had "no major impact on exports".

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